Rebuttal

Rebuttal to Tony Hetherington’s article published in Mail Online 23.11.13 at 22.23.Updated 25.11.13 at 9.17:—

Tony Hetherington describes himself as an “ace investigator”. One would have thought that it was a basic requirement of even a mediocre investigator to investigate the subject matter of his investigation.

Mr Hetherington was invited on at least two occasions to visit the storage sites in question but refused. One can only speculate why.

The same lackadaisical approach taken by Mr Hetherington to investigating the sites is reflected in the article itself.

When analysed, what does the article actually say about Store First Limited and its storage centres?

Yes, Store First Limited operates self storage centres as do the much bigger Big Yellow and Safestore companies mentioned in the article. What point is Mr Hetherington making? Is he seeing something untoward in the fact that Store First Limited’s operation is similar to two of the market leaders in storage? Most people would see that as a plus-point.

Mr Hetherington seems primarily concerned with a promotional video presented by Quentin Wilson. He (Mr Hetherington) seems to have difficulty in grasping the concept mentioned by Quentin Wilson of a “guaranteed projected income” as referred to in the video.

The concept is really quite simple:—

When an investor purchases a storage unit from Store First Limited he is offered a lease-back which guarantees him a rental return of 8% per annum for each of the first two years.

The investor thus has a fixed return of 8% per annum guaranteed for the first two years.

After two years it is up to both Store First Limited and the investor whether the lease continues but, if it does, then the investor’s rental return is contractually fixed at 10% per annum for years three and four.

After four years have elapsed (assuming the lease had already been continued into years three and four) it is again up to Store First Limited and the investor whether the lease continues into years five and six but, if it does, then the investor’s rental return is contractually fixed at 12% per annum for years five and six.

Store First Limited cannot continue leasing back the storage units in years three and four and in years five and six without guaranteeing returns of 10% in years three and four at 12% in years five and six.

It is therefore perfectly possible to project a guaranteed income. If Mr Hetherington feels the need to play with words that is up to him.

Mr Hetherington also struggles with the Quentin Wilson description of the storage centres being “a fully funded debt free network” but the fact is that the storage centres are debt free. Before writing his article Mr Hetherington was provided with the Land Registry Title number of every site so that he could check this for himself.

Perhaps the same lack of commitment that apparently prevented a visit to the sites themselves also prevented an investigation of the information supplied.

The fact is that Store First Limited is a very successful rapidly expanding company. If Mr Hetherington had troubled himself to study the Self Storage Association’s latest annual report he would have read of the hundreds of millions of pounds being borrowed from lending institutions by other companies in the storage industry as opposed to Store First Limited’s nil borrowing from such institutions. The lack of financial leverage in Store First Limited must be the envy of its competitors!

Had Mr Hetherington troubled himself to read a little further into the Self Storage Association’s report he would have read of the general trend in the industry not to be expanding into new sites whereas Store First Limited has acquired three new sites since the start of 2013, and is in the course of acquiring more.

Which leads neatly onto another issue which Mr Hetherington struggles with. How many sites does Store First Limited have? Whilst he tries to make an issue of it, the fact is that he was supplied with the Land Registry details of all those sites already owned and was informed that the promotional video referred to, in addition, to those already owned, other sites under negotiation.

So, on the question of the viability of Store First Limited and its business what has ace investigator Tony Hetherington actually said?

It seems to come down to this:—

You cannot predict a guaranteed yield. Well, yes you can and Store First Limited’s paperwork is perfectly clear on this.

The sites are not debt free. Well, yes they are and Mr Hetherington was provided with the evidence.

There is uncertainty about the number of sites. Well, Mr Hetherington has had produced to him each and every Land Registry number for every site owned and has also been told that the promotional video referred to sites under negotiation.

Mr Hetherington’s article illustrates much of what is wrong in so-called investigational journalism. The investigation is shoddy and when analysed shows nothing.

Instead the article relies on innuendo and irrelevant comment.

The fact that Mr Hetherington concludes his ace investigation with the comment that “whether or not the scheme is sensible, safe and financially sound is debatable” speaks volumes!

The strongest criticism Mr Hetherington can muster as to the viability of the investment is that it is “debatable”! If an article specifically designed to show the flaws in an investment can only conclude that it is “debatable” then in some people’s eyes that must amount to a positive endorsement!

The article has attracted quite a lot of comment, much of it of a personal nature and of a generic nature, and sometimes of a frivolous nature, but when one looks at the comments that are specifically about Store First Limited they are almost all positive and in support.

To conclude:—

For the genuine investor there is really nothing in Mr Hetherington’s article worth reading. It is a great shame that such articles are ever published. They may serve to provide light entertainment for those amused by gossip and innuendo but really should not be taken seriously by those seeking to invest.

The genuine investor should rely on his own trusted independent advisor and his own investigation, and, in that regard, Store First Limited has nothing to fear. Indeed, the same invitation to visit the sites as was extended to Mr Hetherington, is extended to all genuine investors.

Come and visit the sites, judge for yourselves whether they are of high and lasting quality ask your own questions and make sure you are happy before you invest.